West Texas Intermediate (WTI) oil climbs 1.25%, driven by escalating tensions in the Middle East and positive global economic projections from the IMF.
IMF's revised forecast boosts optimism for the US and Chinese economies, countering concerns from China’s real estate sector issues.
Upcoming OPEC+ meeting and expectations of a US crude inventory drawdown boosted Oil prices.
West Texas Intermediate (WTI), the US Crude Oil benchmark, rises amid escalating tensions in the Middle East, along with updated forecasts of the International Monetary Fund (IMF), suggesting the global economy would grow more than expected. At the time of writing, WTI exchanges hands at $77.89, up 1.25%.
Oil price rebounds on Middle East developments, IMF forecasts
The IMF upward reviewed its forecast for the global economy, particularly the US and China, adding that a “soft landing” was in sight, though overall growth and global trade remain below the historical average.
On Monday, China’s property crisis concerns weighed on Oil prices as a Hong Kong court ordered the liquidation of property company China Evergrande Group.
In the meantime, the escalation of the Middle East conflict has boosted Oil prices. US President Joe Biden said the US “…will respond in an appropriate fashion, and it is very possible that what you'll see is a tiered approach here, not just a single action, but essentially multiple actions.”
Aside from this, the Organization of Petroleum Exporting Countries (OPEC+) will meet on February 1, and isn’t expected to provide a decision on the cartel’s Oil supply for April.
Meanwhile, a Reuters poll suggested the US crude inventories were foreseen to have drawn down in the last week some 900K barrels.
WTI Price Analysis: Technical outlook
WTI’s daily chart depicts Oil is neutrally biased, challenging the 200-day moving average (DMA) at $77.45 at the time of writing. If buyers keep prices above the latter, they could test the 100-day moving average (DMA) at $79.28. Once cleared, WTI would turn bullish, and resumes its uptrend toward $80.00. On the other hand, if sellers keep WTI price below the 200-DMA, that could pave the way to the 50-DMA at $73.58.
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